Umbrella-Company Limited
Registered number: 06969639
Annual report and
financial statements
For the year ended 30 June 2023
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UMBRELLA-COMPANY LIMITED
COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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UMBRELLA-COMPANY LIMITED
CONTENTS
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Independent Auditor's Report
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Statement of Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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UMBRELLA-COMPANY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023
The directors present their Strategic Report for the year ended 30 June 2023.
The Company continued its principal activities which is the supply of its employees' consultancy services.
The directors are satisfied that the Company has generated trading profits in line with expectation.
Principal risks and uncertainties
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The principal risks to the business are changes in tax legislation and credit risk. The Company stays abreast of any such changes and is dynamic in its response to facilitate any necessary changes. The Company actively makes representation at trade associations and is a member of the leading trade and compliance bodies. The Company performs credit checks on all larger customers and terms of business are set accordingly, to reduce credit risk. The Company arranges insurance cover for larger customers where credit facilities are required.
Financial key performance indicators
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The Company's key financial and other performance indicators during the period were as follows:
30 June 2023 30 June 2022
Turnover £466,038,765 £402,134,642
Gross Margin 1.15% 1.46%
Turnover has increased by 16% over the corresponding year albeit gross margin has dropped due to the competitive market and a significant increase in inflation. The introduction of changes to IR35 legislation in April 2021 is a significant factor in the turnover increase with a net shift in PSC contractors to an employed solution.
The Company has managed to maintain administrative costs at a relatively low level despite inflation effects and the increased work associated with the rise in turnover.
Cash balances have decreased by £1.7m.
Strategy and future developments
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The Company is committed to increasing business from existing customers and winning new customers.
The Company continues to diversify by developing new products to improve its client service.
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UMBRELLA-COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
Directors' statement of compliance with duty to promote the success of the Company
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The Directors are satisfied that they act in way that has regard to all considerations of Section 172 of the Companies Act 2006. These considerations extend to:
Likely consequences of decisions in the long-term
Operational decisions are delegated to the Executive team of operational directors. The performance of such decisions is monitored by the board through circulated KPIs, email and one-to-one meetings.
Employees Interests
The Directors acknowledge employees as the key business asset. Employees are encouraged to be involved and achieve within the Company. Communication by regular meetings and emails from line managers coupled with regular updates on broader more strategic matters from the Group CEO.
A staff ‘Fun’ committee is in operation to organise staff events throughout the year and is given a budget by the directors. This creates good teamwork and strengthens inter-departmental relationships. The committee is represented by staff from a variety of departments and backgrounds.
Relationships with Customers and Suppliers
We work very closely with our customers at both operational and board level. Communication and contact are frequent and regular, at both a field level and senior management / director level.
The Company recognises the relationship and knowledge of our customer base as paramount to the business success.
The Company has several key suppliers and good relationships are maintained. The Company pays suppliers on or before due dates as a matter of course.
Environment and Communities
Every effort is made by the Company to minimise damage to the environment. Every effort is made to modernise techniques to involve less printing and paper with more electronic media. A recycling firm is engaged by the Company to deal with Company’s wastepaper products.
Business Conduct
The Company has a staff handbook which is updated as and when necessary. The Company maintains high professional work standards and is an accredited member of the FCSA, which is the relevant leading membership body of the industry. This accreditation is only gained upon successful completion of a rigorous annual audit.
Members
All members’ interests are treated equally being only one class of share.
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UMBRELLA-COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
This report was approved by the board on 6 March 2024 and signed on its behalf.
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UMBRELLA-COMPANY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023
The Directors present their report and the financial statements for the year ended 30 June 2023.
Directors' responsibilities statement
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The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the Directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The principal activity of the Company is the supply of its employees' consultancy services.
The profit for the year, after taxation, amounted to £2,125,311 (2022 - £2,420,813).
The Company paid a dividend during the year of £2,820,000 (2022 - £1,600,000).
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UMBRELLA-COMPANY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
The Directors who served during the year were:
Engagement with employees
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Employees are kept informed about the progress and position of the Company by means of regular departmental meetings.
The Company's policy is to give full and fair consideration to applications for employment made by disabled persons, having regard to their particular aptitudes and abilities. Disabled employees receive appropriate training to promote their career development within the Company. Employees who become disabled are retained in their existing posts where possible or retrained for suitable alternative posts.
The Company’s business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report on pages 1 to 3.
The Directors have prepared detailed forecasts for 12 months from the signing of the financial statements. The Company meets its day-to-day working capital requirements through its own cash funds, which stood at £16.2m as at 30 June 2023. The Company’s forecasts and projections, which take into account the risks and uncertainties detailed in the strategic report, show that the Company should be able to operate within the level of its current working capital requirements.
In light of this and after making appropriate enquiries, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period of at least 12 months from the date of approval of the financial statements. For this reason, they continue to adopt, and consider appropriate, the going concern basis in preparing the financial statements.
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UMBRELLA-COMPANY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
Economic impact of global events
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UK businesses are currently facing many uncertainties such as the consequences of Brexit, COVID-19, environmental sustainability and geopolitical events such as the Russian invasion of Ukraine. These uncertainties have contributed to an environment where there exists a range of issues and risks, including inflation, rising interest rates, labour shortages, disrupted supply chains and new ways of working.
The Directors have carried out an assessment of the potential impact of these uncertainties on the business, including the impact of mitigation measures, and have concluded that these are non-adjusting events with the greatest impact on the business expected to be from the economic ripple effect on the global economy. The Directors have taken account of these potential impacts in their going concern assessment.
Umbrella-Company Limited continues to work with its partners to minimise any impacts of these events and maximise the realisation of any opportunities they may provide to the business.
Matters covered in the Strategic Report
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As permitted by Section 414 (c) (11) of the Companies Act 2006, the directors have elected to disclose
information required to be in the directors' report by Schedule 7 of the "Large and Medium-sized Companies and
Groups (Accounts and Reports) Regulations 2008", in the Strategic report.
Disclosure of information to auditor
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Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the Director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
The auditor, Mazars LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 6 March 2024 and signed on its behalf.
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UMBRELLA-COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF UMBRELLA-COMPANY LIMITED
Opinion
We have audited the financial statements of Umbrella-Company Limited (the ‘Company’) for the year ended 30 June 2023 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
∙give a true and fair view of the state of the Company’s affairs as at 30 June 2023 and of its profit for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the "Auditor’s responsibilities for the audit of the financial statements" section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
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UMBRELLA-COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF UMBRELLA-COMPANY LIMITED
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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UMBRELLA-COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF UMBRELLA-COMPANY LIMITED
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
Based on our understanding of the company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation, anti-money laundering regulation.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
∙Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
∙Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
∙Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
∙Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.
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UMBRELLA-COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF UMBRELLA-COMPANY LIMITED
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation and the Companies Act 2006.
In addition, we evaluated the directors’ and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, revenue recognition (which we pinpointed to the cut-off assertion) and significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not limited to:
∙Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
∙Gaining an understanding of the internal controls established to mitigate risks related to fraud;
∙Discussing amongst the engagement team the risks of fraud; and
∙Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of the audit report
This report is made solely to the Company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body for our audit work, for this report, or for the opinions we have formed.
John Daly (Senior Statutory Auditor)
for and on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor
One St Peter's Square
Manchester
M2 3DE
6 March 2024
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UMBRELLA-COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
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Interest receivable and similar income
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Interest payable and similar expenses
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Profit for the financial year
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There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.
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There was no other comprehensive income for 2023 (2022:£NIL).
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The notes on pages 14 to 30 form part of these financial statements.
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UMBRELLA-COMPANY LIMITED
REGISTERED NUMBER: 06969639
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 6 March 2024.
The notes on pages 14 to 30 form part of these financial statements.
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UMBRELLA-COMPANY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Total transactions with owners
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Total transactions with owners
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The notes on pages 14 to 30 form part of these financial statements.
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Umbrella-Company Limited ('the Company') is a private limited company, limited by shares, incorporated in and registered England and Wales (registered number 06969639). The address of the registered office and principal place of business is
Bollin House
Bollin Walk
Wilmslow
Cheshire
SK9 1DP
The principal activity of the Company is the supply of its employees' consultancy services.
2.Accounting policies
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Financial Reporting Standard 102 - reduced disclosure exemptions
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The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Cloud Umbrella Limited as at 30 June 2023 and these financial statements may be obtained from Bollin House, Bollin Walk, Wilmslow, Cheshire, SK9 1DP.
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
The Company’s business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report on pages 1 to 3.
The Directors have prepared detailed forecasts for 12 months from the signing of the financial statements. The Company meets its day-to-day working capital requirements through its own cash funds, which stood at £16.2m as at 30 June 2023. The Company’s forecasts and projections, which take into account the risks and uncertainties detailed in the strategic report, show that the Company should be able to operate within the level of its current working capital requirements.
In light of this and after making appropriate enquiries, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for a period of at least 12 months from the date of approval of the financial statements. For this reason, they continue to adopt, and consider appropriate, the going concern basis in preparing the financial statements.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Statement of Comprehensive Income over its useful economic life.
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Amortisation is provided on the following bases:
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance basis.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
- 19 -
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight line basis over the lease term.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
Interest income is recognised in profit or loss using the effective interest method.
- 20 -
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
2.Accounting policies (continued)
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
- 21 -
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Judgments in applying accounting policies and key sources of estimation uncertainty
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There are no critical judgements that the Directors have made in the process of applying the Company's accounting policies that have a significant effect on the accounts.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Recoverability of receivables
The Company establishes a provision for receivables that are estimated not to be recoverable. When assessing recoverability the Directors consider factors such as the aging of the receivables, past experience of recoverability and the credit profile of individual or groups of customers.
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An analysis of turnover by class of business is as follows:
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Provision of services by flexible workers working through an umbrella company
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All turnover arose within the United Kingdom.
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The Other operating income in the prior year related to the settlement of a insurance claim.
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- 22 -
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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The operating profit is stated after charging:
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Depreciation of tangible fixed assets
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Amortisation of intangible assets, including goodwill
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Other operating lease rentals
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Defined contribution pension cost
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During the year, the Company obtained the following services from the Company's auditor :
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Fees payable to the Company's auditor for the audit of the Company's financial statements
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The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.
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Staff costs, including Directors' remuneration, were as follows:
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Cost of defined contribution scheme
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- 23 -
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
8.Employees (continued)
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The average monthly number of employees, including the Directors, during the year was as follows:
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The average number of monthly contracted, flexible employees during the year was 6,069 (2022: 5,445).
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Company contributions to defined contribution pension schemes
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The highest paid Director received remuneration of £230,412 (2022 - £214,034).
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The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid Director amounted to £NIL (2022 - £NIL).
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Other interest receivable
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Interest payable and similar expenses
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- 24 -
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Current tax on profits for the year
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Origination and reversal of timing differences
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Factors affecting tax charge for the year
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The tax assessed for the year is lower than (2022 - higher than) the standard rate of corporation tax in the UK of 22% (2022 - 19%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 22% (2022 - 19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Other differences leading to an increase / (decrease) in the tax charge
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Total tax charge for the year
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- 25 -
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
12.Taxation (continued)
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Factors that may affect future tax charges
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From 1 April 2023, the rate of corporation tax in the United Kingdom increased from 19% to 25%. Companies with profits of £50,000 or less will continue to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profits increase.
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The goodwill related to the acquisition of the assessed trade and assets of Paymatters LLP during 2011.
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- 26 -
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Amounts owed by related undertakings
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- 27 -
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Included within other creditors are accruals of £18,991,245 (2022: £22,778,300).
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Charged to profit or loss
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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Tax losses carried forward
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- 28 -
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Allotted, called up and fully paid
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600 (2022 - 600) Ordinary A shares of £0.01 each
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Profit & loss account
This reserve represents the cumulative profit and losses.
The Company's assets are secured to a bank loan drawn by Cloud Umbrella Limited. The bank loan balance at the year end amounted to £Nil (2022: £169,204).
The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in independently administered funds. The pension cost charge represents contributions payable by the company to the fund and amounted to £27,390 (2022 - £22,914). Contributions totalling £Nil (2022 - £Nil) were payable to the fund at the balance sheet date and are included in other creditors.
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Commitments under operating leases
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At 30 June 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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- 29 -
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UMBRELLA-COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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Transactions with directors
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At the year end, the directors' loan account balance of £1,088,621 (2022: £682,709) is included within amounts owed by related undertakings. Interest of 0.5% above base rate has been charged on these balances, with a total of £Nil (2022: £Nil) being charged for the period.
During the year the Company paid M Grady £107,943 (2022: £130,055), and charged interest of £Nil (2022: £Nil) for the same period. At the year end M Grady owed the Company £284,749 (2022: £176,806).
During the year the Company paid N Holmes £107,969 (2022: £130,071), and charged interest of £Nil (2022: £Nil) for the same period. At the year end N Holmes owed the Company £283,872 (2022: £175,903).
During the year the Company paid S Grady £95,000 (2022: £132,500), and charged interest of £Nil (2022: £Nil) for the same period. At the year end S Grady owed the Company £260,000 (2022: £165,000).
During the year the Company paid S Holmes £95,000 (2022: £132,500), and charged interest of £Nil (2022: £Nil) for the same period. At the year end S Holmes owed the Company £260,000 (2022: £165,000).
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Related party transactions
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Umbrella Accountants LLP is a related party due to its members being directors of Umbrella-Company Limited. Umbrella-Company Limited invoiced Umbrella Accountants LLP £151,965 (2022: £86,580) during the year and this is included within turnover. The Company also paid expenses on behalf of Umbrella Accountants LLP amounting to £48,930 (2022: £6,792). Umbrella Accountants LLP repaid the Company £100,385 (2022: £114,409) in the year. The balance outstanding at the period end is £16,248 (2022: £59,481) and is included within debtors.
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The immediate and ultimate parent is Cloud Umbrella Limited.
The directors do not consider there to be a single ultimate controlling party.
- 30 -
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